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>> it's real estate day on fox business and sandra smith starts our coverage in new york city, one of the most expensive places in the world to buy a home. sandra? >> hey, charles, well, manhattan continues to be a safe haven environment for those who want to invest in real estate or buy a place here, to go shopping or hit the trendy restaurants or bars or a show. we're going to have a look for you the next hour of varney about two and a half million dollar apartment, what you get for that kind of money and who is buying these places? manhattan's real estate market is booming. it's a seller's market right now. what does it take? we're going to have the answers to all of that with you, charles, coming up at 10:30 on

varney. charles: i can't wait. sometimes i stand in central park and look at the apartments, are there that many rich people out there? i can't wait, sandra, thanks a lot. >> exactly. charles: don't talk about home builders stocks not necessarily on varney, but they've been soaring in the past year, nicole, i know you've got one that's more than doubled. >> i thought you were going to say a manhattan the apartment not everyone is rich in manhattan. >> are you serious? >> yeah, i'm serious, come on, let's get to the stock and we've talked about the housing recovery and what we have seen and that's been one of the bright spots as you noted at the top of the show, charles. and take a look at this stock and it's a great example, up nearly 115%, over the last 52 weeks alone. so, if you were ahead of the curve, you're loving this kind of action. >> you really are. that's why you've got to buy them sometimes when nobody else likes them. thanks a lot, nicole. now, the theme of the day is the

new normal. economists are predicting 2.4% growth in the entire year, voters aren't either. and a poll shows more than half think the worst is yet to come with the economy. joining us keith fitz-gerald, i was just talking sandra-- i'm sorry, nicole about pulte homes and home builders in general. is there still a play in that area? a lot of these stocks moved long before housing started to improve? >> yeah, i think they moved on speculative people just looking to get ahead of the thing. i'm leery of additional upside here. and i'm concerned it's housing bubble 2.0 and missing first time buyers and tradeup. what we're seeing in many markets is overseas buyers with lots of cash coming in, bypassing the mortgage markets and swooping down to pick up real estate, it's fast money and they're going to disappear as soon as they came. >> what about the new normal, you know, we had the fox news poll and a whole lot of other polls out there that suggest a

lot of americans are just becoming not necessarily okay with this, but coming to grips with it, maybe like the last stage, this is it, it ain't getting any better than this? >> i think that that's extremely telling because it suggests a psychological shift in this country and for a country that's always made its future based on hope and optimism, that's troubling. >> you know, keith. it's liz macdonald here. >> hi, liz. >> i remember what paul harvey said, in times like these it helps to remember there's always been times like these, but when you look at what our economic recovery has been in the past, isn't it usually ten months is the average recession and in year three we get a recovery? what are we looking at now with 3 million people less working in the work force? >> i think that's a very important observation, i think what it comes down to is the length of cycle. the problem i have, if you look alt the data, the average cycles are 17 to 21 years in length,

i'm talking big cycles. with the influx of modern mechanisms we've seen compression of that. business cycles are quicker. in 2014, we're going to see the recovery in earnest, a little bit yet to wait. charles: okay, keith and next time you come back we'll find out if we should buy ahead of this big turn, but we appreciate it as usual. now, our next guest says that commercial real estate is booming and of course he doesn't sell commercial real estate, but ask if the new normal applies to his business as well. big news from linkedin, the stock will soar at the opening, this is at least the third time my subscribers are in the stock and we've talked about it in the past and earnings report beat the street by 100% and the stock looked like it was going to break out and rumors that facebook is getting in the industry hurt the stock, so sometimes it benefits from this buzz, but one thing is clear,

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electrical relay device, they called it the beyonce device, there you have it. we're seconds away from the opening bell, the 14,000 mark, you say it could go further liz: liz: the s&p 13 times earnings what it was in 2007. if it hits 14, that means we've got an s&p of 1600, 15, which we saw again in early 2007, that's an s&p of 1700, again, we're talking forward earnings and p.e. ratios for the s&p. charles: bottom line the stock market is severely undervalued here, and put your fears and worries, you can legitimately argue stocks have a lot more room to the upside. we'll see what happens, bell has gone off right now and we want to check the big board and see how the trading kicks off. looked lackluster in the pre-market and the dow 13,9.

there's a deficit correlation and i want to find out from nicole where linkedin shares are opening. >> easily open over 10%, 13%, it's looking higher. a company remember the ipo back in 2011 compete against monster worldwide and talking about 202 million users and it's 52 weeks over 60% and comes out with the quarter and ebay surprised even themselves and exceeded, and you used the word lackluster and i agree, it says 18 points to the upside, but look, look, the traders showed up for work, it's snowing and everybody is here, busy, we've got action for you. >> hey, wall street is like the new post office, neither rain, sleet nor snow would stop them from making the cash. >> and it's placed nicely into a

new survey. 29% say the economy will never fully recover and 60% of people believe this is the new normal of underemployment, and that's what workers have to take jobs below their skill level at lower pay and with less job security because well, they're lucky to find a job and e-mac, no wonder that a cite that helps you find a job like linkedin is doing so well liz: liz: what's striking about the rutgers study, i know personally i have family members that have been laid off and pointing out that people not wanting to work, 29% of those surveyed not wanting to work and that's up from 22% in 2010. >> it is interesting because you know, you look over the last couple of years and i'm looking at part of that report and we're blaming less illegal immigrants, blaming less bush's policies, the war on terror and two things that stand up the most, the idea that people don't want to work and that's a politically

incorrect statement to agree with and the jump in skills, just not having the skills, you know, 26 to 41%, and so when i hear the president talk about opening a big, you know, 600 community colleges, i'm not sure that's going to exactly cure what ails us right now. >> you're right. we're in the recovery of falling economic expectations, unfortunately. we've been here before, the country and economy, can pull out of this again. >> you're optimistic? >> i'm always optimistic. >> that's why we love having you, i've he got to talk to you once a week no matter what. i've got to get back to nicole, coin star, a tough day today. what's going on? >> coin star, let's talk about coin star, when we talk about coin star, i hear them talk about thousands and thousands of dollars. you talk about coin stars, the kiosks that they have under their belt, but they gave a vision, charles of uncertainty and they came out with a quarter that was weaker than expected. as a result, this stock is down 6 1/4% here in just these first

few minutes of trading. charles: wow, all right. well, what about mcdonald's, i think that mickey d's, used to own coin star how are they faring? >> mickey d's, they talk about the global same-store sales, 1.9 versus the 1.1 estimates. the losses there, pretty flat for mickey d's, the by the way, remember we checked in on linkedin, all time high since the ipo and since we last week a moment ago. >> nicole, if i'm one of the brick and mortar job placement firms like manpower, i offered linked in, $200 a share right now or you know what i'd face a problem down the road like the regular retailers against amazon, they're nuts not to buy this company out right now. >> i think you're a very smart man, charles and i hope that everybody was listening to you, and can do that. charles: thanks a lot. and two of our teams are converging, the new normal of attend economy and some are calling a real estate comeback. small businesses owners and

entrepreneurs are buying commercial real estate. chris from the america tile capital corporation. chris, i think, i think those are the same people buying regular real estate for the most part, flippers, investors, do that necessarily suggest that the broad economy is coming back and in your case, commercial real estate? >> well, you're right, charles. it doesn't necessarily suggest it, but there's a lot of courageous small business owners who are taking this down turn as an opportunity that it is to buy discounted commercial real estate at historic low interest rates and it's a terrific time for them. >> i guess the key selling point from real estate from the beginning of time they don't make more of it. why would somebody be courageous now into a market that's been brutally beaten down? >> well, for the starters, commercial real estate across the country is down anywhere 40 to 60% depending on the market and for a lot of small business owners it's different than buying a home, but for them, if they have to have a brick and mortar place to have their business, often times right now to own is cheaper than

continuing to rent so it makes a big difference for the business, not to mention it creates wealth for them liz: liz: and you can lease it. >> the commercial real estate bubble bursting, a lot of people saying the commercial real estate bubble is going to burst and they said four or five years ago. did that happen? >> it happened to some extent, liz. these are professionals managing the commercial real estate. plenty of class a office space that's overbuilt and sitting there with only 10 or 20% occupancy so it's still a problem. what i do, i actually finance commercial real estate owner occupied commercial real estate for small businesses. >> and because it's interesting as you look at the breakdown of jobs in our country over the last several years, it's without a doubt small businesses, and especially businesses with less than ten employees. that's what's driving your business right now? >> absolutely. and my business was up about 143% last year in 2012 over our

previous record high in 2011 so it's certainly driving it, no question and as i said, a lot of courageous small business people out there that realize this is a great wealth creation strategy for them. charles: christian, we had quite a few signs of hiccups in the last month. a dramatic decline in job creation november to january and an amazing swoon in consumer confidence, a lot of people really concerned, particularly about the first quarter. how wobbly do you feel about this rebound and your business, and how sustainable is it? >> well, i think, i think you certainly have sort of what i've heard some economists refer to as sort of the plow share economy. we're just kind of treading water a little bit. it's certainly this 2.4% predicted growth for this year in gdp is nothing to get overly excited about, certainly not by historical norms, but i think most small business owners it doesn't surprise me that we had a little bit of that dip as reported in the fourth quarter. you know, we had a presidential election, of course, not too many small business owners that

are gging to hire new people in the fourth quarter, it just doesn't happen unless you're a retailer of course and a lot of uncertainty that's come from, obviously, the reelection of the incumbent president as relates to small business owners. charles: thanks a lot. you're extraordinarily informative, and we'll being back with you soon. see if you can match that 140% this year like you did last. >> i'll try my best. charles: i know you will. we've got breaking news from the u.s. postal service two days after announcing it will stop saturday deliveries to save 2 billion dollars a year, well, reports a loss of 1.3 billion in just the last quarter of last year. and that's when everyone was sending out christmas cards and packages, so it's going to take a lot more to stop the bleeding at the postal service. many americans are battling a winter storm on top of the cold and flu season and with all of the flu hype out there that we've certainly been covering in the past couple of months, there are actually businesses that are profiting from it. are they actually rooting for us to get sick? we're going to ask the ceo of a

company that makes a popular cold remedy. time is money and 30 seconds what else we're watching for you today. a story we cover every day on "varney & company," states going broke because of public worker pensions. billions of dollars in the red at 10:25, a guest thinks he has the answer and so-called real estate recovery and people buying homes to live in them or is this just a lot of flippers looking for profit? also, people spending $100,000 on, get this, their closet. that's right, it's not a joke. we're going to bring you the reporter that got this story. and remember, of course, we want to hear from you, end your e-mails right now varney@foxbusiness.com and we'll read them live on the air as they come in and now i have the honors of 7 early movers. start with fleet corp., for fleites and oil companies, beat revenue and earnings and guided higher, why you've got a 12% jump out of the gate. web.com, guess what, beat on the top line, the bottom line, great

guidance and got a 7% move and microchip, tell me if it sounds familiar, beat on the top line, beat on the bottom line, and 6% move. and i'll say it again, this one sync technology, applications are hot and that's what they do, application software, that stock is making a gigantic move this morning. molina health care, one headline read the earnings estimate, not sure how it's going to play out with obamacare. activision, gamers aren't dead, sky landers have done well, call of duty done well and stock is up about 10%. finally say it again, linkedin, a 59 p.e., trading at 16 times sales, 16 times book, a 9% short position on it. the short hate it and wall street loves it significantly, and 144 a share. do you deserve over time for working on your blackberry at home? one cop in chicago says

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>> all righty. let's check on the big board. we opened kind of flat, but now what? you don't come to work in a blizzard for a flat day, do you? 13,991. ap now to a story we brought you

yesterday, chicago police sergeant claims he was pressure to answer work related calls and e-mails when he was off duty. he thinks he should get paid overtime for using his blackberry. he's suing to get reimbursed. joining us now is the lawyer representing that officer. and there are initial reactions to the story, hey, this is a public servant what is he complaining about and b, if he can get paid for it, everybody in america can get paid for it. >> that's actually not true. this is a case to enforce federal labor laws, specifically the fair labor standards act and doesn't apply to people like me, to lawyers, to executives to administrators, to sales personnel, probably to most of your reporting personnel or to you even. it does not apply. it applies more to the blue collar workers, it does apply to the police and it has for many, many years and it says that they need to be paid overtime for

hours worked. charles: so if your client witnessed a crime while he was off duty and he went and broke it up, would he go to the city and say i broke up a robbery on my day off? >> yes, absolutely. charles: he would get paid extra for that? >> absolutely, it's happened. if he's injured in the the course of that-- >> not injured, if he breaks it up, grabs someone and running out of a bodega, anyway, not injured, but does this on his day off, he can actually get reimbursed for that time? >> sure, because he has to make a police report and he has to process the arrest and absolutely, and should be paid for his time. charles: i've got to tell you, we talk a lot about the red ink in this country and the juiabusf the system, and you is this a term for union workers, a privilege they're trying to carve out now and trying to help out. i know you like this to be a class level lawsuit.

>> it is a class level lawsuit right now. charles: okay. >> i wouldn't like it to be, it is. charles: all right. >> is this about union workers? absolutely not. some of the -- you know, there are many, many millions of works that the applies to some are unionized and some are not, makes no difference liz: liz: i hear what you say, i have a lot of friends in law enforcement and family members in the fire department they're saying, hey, wait a second, why don't these cops just -- your client why doesn't he answer his blackberry and e-mail and phone messages during work hours, why doesn't he just say to himself, i need to have that time during the work hours to do that and maybe not take so many breaks as cops often do? >> liz, that's a great question, but what you have to understand, in this case, is these officers and specifically my client are given a blackberry by the police department. this is not the officer's blackberry that he can turn off. he's told, you need to have this

on. you need to monitor this device, this is the employer's device, it's not his. he can't turn it off. if this problem-- you want to remedy the problem all the city of chicago has to do is stay the turn the blackberry off at the end of the workday or put the blackberry in the desk drawer until your tour of duty tomorrow. they don't do that, they want the workers to work for free and that's a problem. charles: again though, paul, i guess the problem though, the rub here is that, you know, you call them public servants, they take an oath to do certain things and to put their lives on the line. certainly how much time does it take to answer an e-mail on a blackberry and why is that, why is that so discouraging for your client or for anyone else who knows that, you know, they take this job, it's going to put an enormous strain on their work time and their free time? >> it's not just answering one e-mail. if that's the case, if an

officer just gets one e-mail or text in in given day and there's no phone calls off duty, they wouldn't need to be paid overtime balls it would be what the law calls deminimus, they're working on search warrants, wire taps and having discussion was their superiors and sub board nanboard-- subordinates and can't say no in the planning session and this is work and they're hourly wage earners and they have to be paid. charles: paul, we're going to follow this and it's an interesting story and so many elements to it. chicago being a place that's completely flat broke. the kids are killing themselves in the streets and we hope that this doesn't get, hang the place up. >> it's a state that's broke, not the city. charles: okay, we'll leave it there. >> the city is not broke. >> we'll definitely have you back and want to follow-up, we appreciate your time this morning. >> thank you. charles: all righty, time for

your morning gold report, somewhat side ways, 1667 an ounce. we do have a real estate reality check though coming up for you at the top of the hour now. i tell you, you know what, things are not as great as they seem. the pompons, and we'll have both sides of the argument represented and one country is using google technology to view or actually to find sheets, could that happen here? . [ kitt ] you know what's impressive?

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imus: >> all right. so get this, the country in lithuania is looking for new ways to find tax cheats, google maps. that's right, lithuanian authorities will use google street views to identify tax cheats with the real value of holdings liz: liz: don't give them ideas. i covered the taxes for a better part after decade and irs and this could be considered an invasion of privacy and whether the street view is correct and looking at the right property. there have been mistakes. charles: i remember when they started with the cameras on the vans and everybody says it's used for this purposen never for that purpose and people think there's a lot of paranoia.

i think it's legitimate. it's realistic that one day that can happen here liz: liz: i'd like to see the street view of you and your property guarding or mowing the lawn. charles: the reality check, the real estate agent is ready to fight me point for point as i pour cold water on what stuart calls the bright spot in the economy. that's new at 10. ? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. all your imptant legal matters in just minutes.

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rear of the speewun of the bright spot in the economy, fox business signs a spotlight on the bright spot, here's a bigger deeper digging on that. welcome to the new hour of "varney and company". stuart varney will be back monday. if you look at the numbers you would think housing is coming back, sales are up, rates are down, prices are up but who is spying? not the general public, 30% of existing homes sales of previously owned homes, only first-time buyers. that number has gone down dramatically. increase in home prices was low in recent months in foreclosures, they are down but launched in part because government intervention lot of homeowners are still struggling. another question, in this rally keep going without ben bernanke priming and pumping $85 billion a month into the system, real-estate agent bullish on housing waiting to jump on everything i just said. this should be good.

good morning. here is our real-estate company, team investment. nicole petallides on the stock exchange. we want to get to this housing story. url housing pool, this is your business and you point out the good things, i am worried about a few things. first and foremost, the federal reserve, $85 billion a month. they can't do that forever. when they stop doing that we find out this housing rally is like lance armstrong at the tour de france. >> you'd have to bring lance armstrong in. that money is not going into housing. it is all of the place. the market likes a little bad news. this is a great thing for housing, a ton of cash going

into housing, funds going into housing, blackstone sunk a ton of money into the market, they are buying up 16,000 homes, not going to sell them at the same time. charles: they're going to rent them. this is what i am wondering. when does the general public and get into this? you got the cash, the investors, that is fine because it helped us hit carrot firma but the notion that housing is warring back, it seems like i don't know, doesn't seem like it is reality with respect to most americans. >> the general public is coming around. we had to get through -- even though foreclosures are down don't let that fool you. a lot of foreclosures to get through especially in judicial states. organically people are starting to sell. people who were raise out of a position where they don't have to short sellers are not going to rent. they are going to turn around and become more fired. this is a cycle we will see five to seven years and is a good

one. housing is leading the way out of this mess. charles: i hope that is true. i do really worry about where we are going with respect to employment, consumer confidence is plunging and the federal reserve, not all eighty-five billion units of housing but clear to me that ben bernanke even though his official mandate for jobs and inflation always talks about the housing market. >> absolutely. when you look at a post or period anytime we go through a major recession it has been housing market that will be economy back. i think people who have some resources, wealthier folks are directing a lot of their resources for housing because they are freaked out about rest of the economy. the stock market doing well but they're worried about that, worried about inflation kicking in for the reason you point out about the fed pumping trillions of dollars into the system so real-estate seems like a relatively safe place but for the general public this is my concern and it is one you just pointed out the blogger economy is incredibly weak, high

unemployment, we are not going anywhere for a long time according to most forecasts, consumer confidence falling back down, the regular consumer is going to turn around and houses are already under water but even if they are looking to buy, i think they really feel strapped, very insecure in this economy. i wish i could share your optimism but not quite. we are going to be a renter nation for a while and that is okay because investors are making money with that. was never going to be a flip situation for any big funds and it shouldn't be for investors right now. you should not be getting into real-estate get out by next year. you should be getting into real-estate make cash flow and a long-term play. i said that 100 times, year play. charles: may 11th, 2011, the 86% of overall purchases in december and only 30%. do you worry this is your

industry, that rates are at all-time lows, a lot of hype about housing and still people are not taking the bait, the worry about that when circumstances change and rates go up? >> they should raise rates a little bit and give better criteria for lending because lending is so tough that a lot of people that want to buy can't buy even though it is cheaper to buy than to rent. they just can't right now. we will see some creative lending especially with all these investors in here with the cash they pump into the market, they own or finance or finance these homes and people will begin creatively. charles: we will be back on the topic and wanting to think about, if the government gets out of the way that might be the only way to see anything. our next guest is warning of another housing bubble. carl smith, assistant professor of economics at the university of north carolina joins the company now. not sure how much of the conversation you heard but why are you concerned about housing bubble?

>> i think a bubble being liquidity events, there's a lot of liquidity in the system, you talk about quantitative easing and the weighing and liquid assets like housing work is when they get hit by a lot of liquidity asset prices spike, people get scared, liquidity retreats, looks exactly like the pattern we have and looks exactly like the pattern the might start again, still a lot of liquidity out there. right now housing extremely liquid, more liquid than is normally and once the liquidity starts to move into the housing market it is likely to prompt another bubble. looks like our story across time. charles: we are not in the bobble yet but the bubble is situated, we are ready to go to the bobble once the $85 billion are still gushing to the general economy and find its way into housing? >> more or less right. the reason if you think about it, if i think about housing from an asset perspective the

regional lot of people are afraid to get into housing is your money is stuck, locked up in the house and it is hard to sell. as it becomes easier to sell as more money get into housing it is safer for an investor to buy a house, safer for a homeowner to put a downpayment on a house, more people do, housing prices start to rise, as they start to rise it becomes a safer investment over the short-term, banks eased their lending standards. more money goes into housing and it is a self reinforcing liquidity cycle that pushes lots of money in, asset prices up -- charles: it feels good. the more people seem to do well the more people jump in. everyone watching kind of lived through that but we have a real estate ball on who doesn't quite think you understand what you're talking about and will tell you why. >> everytime there's a spike or dip in the financial market people cry bubble. we need to stop the bobble market. there is no national real-estate market. we talk about a national real-estate market all the time.

there are tiny pockets of good and bad. a lot of markets that need to go for a lot of foreclosure and a lot of people buying and a lot of markets. i would like to think that there is a legitimate rise in prices through this catastrophe we just went through. >> i don't necessarily -- bubble is a scary word, i don't necessarily use that pejoratively. we think lot of things are in bubbles, the stock market is in a permanent bubble, money is a natural bubble, we think gold is a natural bubble and we don't use that pejorative lee, not all bubbles pop, but you are seeing a decline in liquidity premium, the fact that the ranch to price ratio, you will see that fall over time. that will drive up housing prices. that is what i mean. charles: initially we will all feel good until those little bubbles start to barista. we appreciate it.

you educated us and we will see you again soon. jeff flock continues coverage on real-estate on fox news, in chicago. sell me the house you are in right now. >> i am steps away from the heart those studios. if you look out the window of this unit perhaps you see downtown chicago. it is all about location. a man who tells me it is all about location today, it is also about a lot of valuing real estate. >> used to be the 3 els were location, location, location but in today's location there's a lot of value. >> for anyone who doesn't know who i'm talking to, he is a legendary chicago developer. you survive, don't know how you have done it. prices in chicago are coming back. >> definitely coming back.

the situation in chicago was never as gross as it was in the other city because you never got as high. not as much to fall line thing that definitely more stable now. >> i will put the numbers on this unit. this was a building that was in foreclosure, you brought it back and it is selling again. >> by changing the finish and readjusting prices from the top to bottom. we had a 20% price reduction from initial sales to buying and buying it in foreclosure we adjust prices downward and meade the market. >> a little bit of a lesson. as we kickoff coverage -- charles: before we let you go i saw this chart you put up, something of a charge, not a bullish chart, we still see lower highs. made we found a bottom. not a great looking chart, if we broke through $250,000 a house, i am looking at that chart

thinking you have another lead down side. what do you say to that? >> you were making the point to me that this is not a linear progression. >> absolutely true. definitely staggered points where you get up times and down times and the price points selling the best right now are those that are in the middle where the value is really great. a 3-bedroom, 3 bathroom unit cells in the 600,000 and in the height of the market more 700,000. if you look -- >> you said it is value. >> when you look across you can see the edge of the first building we finished and the demand was so great we were able to start the second one. >> thank you for your wisdom. charles: see you again soon. here's a we have coming up on real-estate day. bargains to be had in several markets, this is two beds and we to bass bought for $78,000 in

november. prices come of. can you guess what it is? we have the answer for you later in the hour. can take a look at this. wealthy homeowners creating many boutiques. $100,000 a pop, the full story in the next hour as well. charles: let's check the big board. the market gliding its way up down 60, 14,000, every time we get there a little bit of anxiety. anytime the weather gets a battle that anxiety too, people moving more to a new high for that one, people buying generators. nicole: it continues to jump. now we have another storm upon us we are seeing the stock to the upside and superstorm sandy, everybody was fighting tooth and nail to get generators. a great stock. charles: a great stock and unfortunately in this new year

of superstorm that will continue to be. the theme of the day as the new normal. economists predicting 2.4% growth in the u.s. economy and that is for the entire year. voters are looking on the bright side. in new fox news poll shows more than half think the worst is yet to come when it comes to the economy. joining the company from chicago is tres knippa. i am going to guess these numbers don't surprise you. >> what is often the policymaking standpoint is when policymakers make decisions, then that policy or that decision doesn't work you know we keep getting fed by the economists? we clearly didn't do enough of it. we should be learning from what is going on in japan. as you increase government debt and increased debt to gdp ratio and increase taxes it slows your economy down. 100% of the time. why can we not learn from the mistakes the japanese economy

today is the same size that it was in 1991 yet they have expanded their government debt and continue to go on fiscal stimulus and it has not worked. when we going to learn? doesn't work. charles: a political expert on this. one of going to learn. >> may take awhile to get past this. we saw top marginal rates increase, a spike in higher income taxes. that has an effect on job creation in this country. consumer confidence is down because everybody's taxes went up with a payroll tax hikes, now you have a ripple effect and folks in washington and a lot americans wondering why. there's a very direct cause and effect, it is a straightforward science. charles: monica said another four years but i hope is not. 20 years because that is what is happening in japan.

>> absolutely and that is what we don't want. it is our shame we seem to have the japanese playbook and we are following it. charles: the flu season is raging, you see people sneezing. our next guest is hoping they don't cover their mouths. every time someone gets the flu this guy makes money. the ceo of the company that makes cold these is next.

charles: good news for linkedin, revenues rose 80% from a year ago and millions of job-seekers and recruiters signed up for their service, brokers raise their price target hitting a new high. already snowing in parts of the northeast, preparing to get pounded with three feet of snow in some areas. the air force canceled thousands of flight, schools of inclose, schools--forecasters expecting it to continue through tomorrow afternoon. the power company new orleans says the cause of the outage that lasted 34 minutes, in the third quarter of the superbowl was a really device. our next guest is making money off of a flu epidemic. he shook my hand, that is when you're confident in your product. he will be next. all stations come over to mission a for a final go.

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stuart: is a media scare, hi, this is an overhype. the media seem to be in league with medical companies to make us all rush out and get a flu shot and be worried stiff about the flu. it is a bust, isn't it? charles: stuart varney is not out with the flu. doesn't believe the hype, he says the cold and flu season is about making money and drug companies and all those kind of guys. my next guest is the ceo of a company that makes cold-eeze. you heard stuart varney.

a lot of people feel that way that this is overblown. i would guess you don't agree with that. >> it has been a really intense season. the incidents of a respiratory illness has been through the roof versus the last couple years. back-and-forth quarter of 2009 everyone was scared about the age of flu. people would thought was the big pandemic. the demand went into weeks, retail is loaded up on products, all of 2010 selling through the inventory. this time around we have a situation where the incident is through the roof and stayed through the roof for several months and you can expect the cough and flew manufacturers will have great fourth quarters of 2012 and should also -- charles: is demand of rear product? >> i have to be careful what i say by continue our product is highly correlated with the incidents of the flu and cold and that incidences is up 20% year after year. charles: your box says cold

remedy, there's no cure for the cold. >> glad you asked that question. you have your dietary supplement, when you feel better, you can take it every day and have your symptom reliever was better for a few hours. and the cold and flu when the product wears off, and just as sick as you were before. with cold-eeze if you take that the first sign of a cold your old is going to be shorter in duration. clinically proven to shorten by 42%. what was going to last 9 days. why would anybody want to be sick today longer than they have to be. >> i have taken your product and it does work. what are the key ingredients? the magic ingredients that shorten the duration of the cold? vitamin c? >> tracy byrnes interviewed me a year-and-a-half ago and she said the same thing and she said i never see the product advertised but i've of your product. [talking over each other]

charles: two beautiful women that use your product. >> not arguing. we can talk after the show. cold-eeze releases zinc ions in a mao the mic dietary supplements the have zinc in the. those are products that going to go into your stomach and the digest and maybe they will be absorbed by your blood system and may be provided me in support by our product releases zinc ions in your mouth, they are absorbed by your upper respiratory system. the cold virus enters through your mouth or nose, europe respiratory system. the cold virus -- charles: running out of time. does it feel a middle odd being in a business where you make money off of some personal human suffering? >> just the opposite. i'm in the business of helping people make and feel healthier. if you take the product you are going to be sick, you will be happy. it is a note for me. i personally respond to every e-mail and every day i get e-mails from people saying i love you, love your product, made me healthier, may save my wedding, i was able to go --

>> before, after, during. charles: we are out of time. if stuart varney were here he would tell you it was a great interview and a great commercial. thank you very much. next, richard dreyfuss is here. this one might actually tell you something useful like how to fix public worker pensions without federal help. we will be right back. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hisortfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age.

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charles: he grabs someone running out, anyway, he is not injured but does this on his day off, he can get reimbursed for that time. >> has to make a police report and process the arrest, absolutely, he should be paid for his time. charles: the attorney representing a chicago cop who is suing for over time, reading his blackberry off-duty, chicago wasn't broke, you can bet we will follow with that story as it develops. one of my seven early mover is better than expected profits, payment -- how is that share doing? at nicole: and new high, early mover is right on the money. what about this stock, a short time ago over 13%. this financial service company,

really doing well. in no one else is doing well? activevision call of duty and sky landers and giants and all those things my kids bet me for a regular basis new highs here too, up 8.2%. not sure it is a new high but it is a good move. charles: more real-estate where you can find great deals, several markets across the country. how much do you think this house is going for? tanya will tell us later in the hour around 10:45 she will let us know. my next guest says there's a solution to public worker pension problems. states like illinois which is $96 billion in the red and state worker pensions alone. joining me is richard dreyfuss from the manhattan institute. whenever someone says they have pension obligations, higher taxes. and a state like illinois, may be a federal bailout?

>> i hope not. i think the answer is you got to live within your means and what we have done is overcommitted and overspent. what i would like to see is better fund our plans, bring them more into balance without increasing taxes. and -- connell: issuing new bonds to refinance the liabilities? do you talk about the easier said than done, how do you lend illinois more money? how do you get favorable rates to extinguish the debt that is out there? >> i wouldn't do that. these pension obligation bonds are part of the problem because they allow you to further leverage the plan so what i would like to see is prohibition on them. we ought to be paying for these benefits and have an environment where we are looking at cutting edge expenses and better

funding. charles: the municipalities should be cutting? but there is no municipality in the country talking about cutting expenses. >> this is political will. this needs to be done because the alternative will be insolvent and going bankrupt and you can stop in california. i think that is a harbinger of things to come if we don't turn things around. charles: how about this when? signing unfunded liabilities to younger and more recently hired workers whose own benefits will likely prove unsustainable as their salaries arrived. how would you implement something like that? >> i don't like that because what that is is transfer costs to the next generation of -- charles: that is what is happening right now. >> exactly right because these unsustainable causes, they want to pay for them now, they just assign them to the new work force and the new group of taxpayers some of whom haven't been born yet. charles: before i let you go you did great work, but

realistically with the political climate and the climate in the country, we had a national election, will any of this get implemented? do we have to go down this really tough path and learn this the hard way? >> i don't think we have a choice. i think the alternative is bankruptcy and that -- charles: got to tell you some people will call you on it and unfortunately it may be bankruptcy but we enjoy you and your movies and we will see you again soon. another downside to obamacare, $30 billion tax on the medical device industry that of course will eventually get passed on to you, that is next. [ male announcer ] ok, here's the way the system works.

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spoiler alert: it's low. really? yes, really. e-trade offers investment advice and guidance from dedicated, professional financial consultants. it's guidance oyour terms, not ours. that's how our system works. e-trade. less for us. more for you. charles: falling real-estate all day, let's see some more properties, adam shapiro live in new jersey, let's start with an arrest smith in a high-rise in manhattan. let's just say if i wanted to buy this how much would it cost? >> on the market for $2.5 million, it is a condo in the nomad neighborhood of manhattan north of madison square garden, it we are about to show you the most common

$2.5 million home in the city of new york and that is a full washer and dryer, very high end, hard to come by in this city, let alone two bathrooms, two bad rooms, this is 1900 square feet, currently on the market for $2,375,000 and all about the neighborhood, being in the city, near the shows, near the trend mr. jack hotels and restaurants and this is that. the real-estate firm that is listing this place as well as all the other places in this building over a century old building say that the fourth quarter of 2012 was the best for man hadn't real-estate of any fourth quarter over the past 25 years, apartment and condos in this city are selling like hotcakes in anticipation of the fiscal cliff. they have a lot of sales. the u.s. dollar, a lot of

international buyers and i found this interesting, baby boomers that normally buy a place in sunny florida from long island to new jersey are now going to the city. they want their kids to be near bars and restaurants, it there's a changing demographic going on here so we will be talking about this all day long from the middle of manhattan so we will go to another $2 million home in new jersey where adam shapiro is located, see what you can get there. adam: i will take your washer and dryer and up you to your own private steam back in one of these showers, just part of what you will get here, six bedrooms, five the rooms, six bathrooms. go on and take a look at this. this house on the market $2.6 million. if you were going to buy this house, put down 25%, $650,000 and finance $1.5 million you would be looking at a monthly

payment of $12,800 a month, taxes on this as we come into the great hallway on the second floor, taxes on his property when you $25,000 a year. when we spoke to real-estate urgency earlier this morning weber telling us homes in this area, somerset county, homes are selling like hotcakes. $1 million homes, multiple -- when we spoke to jane the real-estate agent who we interviewed two hours ago she said you have got to get the home on the market now because the spring selling season has already begun. buyers are holding out. we spoke to a rutgers professor who said buyers are coming in and sellers holding out, they want to see price increases of 5% to 10% before they put their homes on the market. one thing that happened is we have seen price increases nationwide of 8.3%, year over year in december, the best price

increase since 2006 so this,$.6 million, if you finance $1.5 million you are looking at a monthly payment of $12,800 a month, property taxes that you back $25,000 a year. charles: a couple heinekens in the refrigerator and meet you in a couple hours. thanks a lot. it is an interesting point. existing home prices moving up a little bit but they are not where they were last june, if that is where the fight is are people still trying to -- you have sellers who want more but the buyers feel like it is a buyer's market? sandra: a little bit and people know if they win they will make more money because the markets are playing organically, but that in perspective. the taxes on $2.6 million here or in new jersey, in arizona $2.6 million, 10,000 square feet, the washer and dryer --

$7,000. [talking over each other] charles: you live better than we do in arizona. obamacare costing the medical device industry $30 billion over ten years. the new health-care law includes a tax on anything from his plans to bedpans. will the industry fight back? joining me is daniel more of the medical device manufacturing association, the ceo of cyber medical device company, the first question i would ask is when this all came out, did you say why us? >> yes. there's some of why us? reno we provide jobs and we have been a growing industry and this is an industry in which we lead the world and the last thing we think should happen in this industry that we should put a tax on jobs, the we should put a tax on innovation, put a tax on patient care. charles: also there is another

aspect to this. a lot of money. it has to come from somewhere. if it comes out of research and development that means future innovation is either lost or is pushed down road. that future innovation even though it comes up in the numbers, income statements and price-to-earnings ratio and all that stuff, also has a human factor and the human impact to this thing. we are talking about people who might have -- and they won't be because these innovations have been pushed off. >> you are right. we are all about patient care. if you go broader than that we are impacting live in many ways and starting with the economy we know the president and congress agree we need to be growing our economy. we need to be growing jobs. we need to be growing our exports. this is an industry that offers all three of those things so whether we are impacting lives by hiring people in high-paying jobs or doing what we do every day and that is to provide better quality of life for patients and longevity, you are

right, we impact lives in many ways. charles: we don't have a lot of time but i want to say good luck with this. i think it is outrageous and we hope we will talk to you soon. >> thanks. charles: want to ask about this. i don't know where the administration, why they targeted these guys. they don't have the lobby the big drug companies have. sandra: that is right. there is movement among democrats to repeal this because it is so noxious. i read a first semi monthly payment under the obamacare tax is an astounding $97 million. they are already talking about rolling back r&d which you pointed out, job layoffs and some of our most innovative companies are talking about taking companies overseas because of this and that is why you have democrats saying this was really bad idea, maybe we should repeal this. charles: the sun can lobby will be the only one that won't get this repealed. check out this house in phoenix,

bedrooms, two bad, sold with a month ago for $78 billion after being in foreclosure. can you guess what it is selling for now? our real-estate grew is going to phyllis and after this. twins. i didn't see them coming. i have obligations. cute obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.

charles: sticking with the

real-estate vein the squatters moved into a luxurious $2.5 million home in boca raton got the boot from bank of america for trespassing. the brazilian man was there since december without paying a dime through a legal loophole. officials say won't be charged with any crime. your come, postal service lost some one$.3 billion from october to december. normally strongest for the quarter, the holiday season didn't work out, this is two days after announcing they will stop delivering mail on saturdays. a massive storm has started to hit the northeast. expected to drop several feet of snow in some areas. on effect from maine to new jersey, flights of been cancelled and cities prepare for the storm and more real-estate to come, with tanya market annex next.

charles: in honor of real-estate day we are going to do one of our favorite segments on "varney and company," guess the price of that house. tell me about a first house -- if you jog with coyotes and it is 80 degrees outside. >> was 80 degrees outside and compared to this hopefully i can get home today. this one is a three bed room, two bath, 1400 sq. ft. -- built in 2006 and sold for 160.

four closed in november of 2012, for $78,000. for now it is on the market for $93,000. but when you look at -- people flip and see these shows that great about flipping, think about this. and $4,000 into the rehab to make it nice again. they pay real-estate commissions on the market because this person will walk away with $4,000. it is not like the flipping days when you are making lots of money. charles: i would think regular people, forget -- this is why i am so confused about the great housing boom, $78,000 for house like that. >> it is a steal, you have to buy down at the auction and most regular people don't know how to do that. charles: i also heard you talk about a mansion in texas that was $20 million and it has gone for $6 million. >> i love this story. the house was $20 million.

right now is appraising at $10 million. they dropped the price to $8.9 million. is going to auction for $5.9 million and it is 23,000 square feet on two acres, bedrooms, 14 bathrooms, four kitchens. charles: the hotel -- >> think about that. and you can afford it. that is the bottom line, and pick it up for $6 million, and you have money in the bank with that. charles: something like this in the market, seems like texas is hot -- [talking over each other] >> i don't know where it is in houston, texas is an interesting state because the property taxes, not really high in texas, you have to pay the taxes even if you paid a house for $6 million. texas is an interesting state,

never went up, or down. if you talk about cash flow, property taxes eat into your cash flow. charles: if i could get something that costs 20, it seems attractive. charles: we have shown you expensive homes, how about an expensive closet? $100,000 for a closet? that is next. (a clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."

charles: we have shown you some luxury houses. now we will show you a luxury closet. 100 grand, and candice jackson reports for the mansion section of the wall street journal. you have a heckuva job. >> sometimes seems that way. charles: $100,000 for project? >> you get really amazing kitchen or home movie theater, and on the closet? sometimes a lot more, of to $1 million or $2 million. >> you could renovate a whole house for $100,000. >> this is a story our girls can

get with. you see that first sex and the city movie where kerri and mr. big go and buy this apartment and he produces this unbelievable closet for her hist. is a dream sequence but so real and a lot of women sacrifice -- fantasized about having the ultimate closet. >> a lot of women at spoke to said the movie inspired them to do their closets, when this trend took off when that movie came out and people started building these carry bradshaw closets that looks more like designer boutiques that a closet. charles: this is keeping up with the joneses. if you run in certain circles, after a while you try to run up each other, this is it, everyone is trying to wannabe each other. >> this is next thing. everyone has a great kitchen and a movie theater and the next thing you do is the closet. >> when you show high end home they literally stage the clauses which they put a victoria's secret back in their shoes just perfectly so when you walking you have that feel.

it is unbelievable. charles: what could make it 100 grand? i could see a back room with gold faucets. >> there multistory. a lot of square footage, about 21,000 square feet of space and fixtures are so high end, cabinetry might be higher quality than you have in your kitchen so that adds up and the lighting, a professional looking displays that might rival what you see in the janelle store or product. a lot of women coming with designs from their favorite store and replicate that. charles: you could see this being getting bigger and bigger, won't be uncommon to have a $5 million closet one day. >> will still be uncommon. charles: it will happen. >> it will happen and women are spending more time in these clauses. not just for women, there are men creating these high-tech man cave/closets for themselves as well. charles: great job. highlight reel is next. [ man ] e the audacity to believe your financial advisor should focus on yr long-term goals,

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